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Obama offers concessions on carbon-dioxide trapping

View SlideshowRequest to buy this photoRogelio V. Solis | Associated Press photosThe Kemper County power plant in Mississippi will be the newest and cleanest coal-fired facility in the country when it is completed. The carbon dioxide that is trapped in the smokestacks will be used to help get oil out of the ground and remain buried.

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By Dina CappielloASSOCIATED PRESS • Tuesday December 24, 2013 6:21 AM

DE KALB, Miss. — America’s newest and cleanest coal-fired power plant comes with a catch: The
heat-trapping carbon dioxide removed from its smokestack pollution will help force more oil out of
the ground.

Some environmentalists complain that it ends up releasing more carbon dioxide into the
atmosphere than is stored underground as waste.

It’s another example of the Obama administration promoting new, cleaner technologies and
allowing companies to do things it otherwise would oppose as harmful to the environment.

At first, the idea behind “carbon capture” technology was to make coal plants cleaner by
burying, deep underground, the carbon dioxide that they typically pump out of smokestacks.

But that “green” vision proved too expensive and complicated, so the administration accepted a
trade-off.

To help the environment, the government allows power companies to sell the carbon dioxide to oil
companies, which pump it into old oil fields to force more crude to the surface. A side benefit is
that the carbon gets permanently stuck underground.

The program shows the ingenuity of the oil industry, which is using government green-energy
money to subsidize oil production. But it also showcases the environmental trade-offs Obama is
willing to make, but rarely talks about, in his fight against global warming.

Companies have been injecting carbon dioxide into old oil fields for decades. But the tactic
hasn’t been seen as a pollution-control strategy until recently.

Obama has spent more than $1 billion on carbon-capture projects tied to oil fields and has
pledged billions more for clean coal. Recently, the administration said it wanted to require all
new coal-fired power plants to capture carbon dioxide. Four power plants in the U.S. and Canada
planning to do so intend to sell their carbon waste for oil recovery.

This month, former Energy Secretary Steven Chu announced he was joining the board of a company
developing carbon-capture technology.

The unlikely marriage of coal burners and oil producers hits a political sweet spot.

It silences critics who say the administration is killing coal and discouraging oil production.
It appeases environmentalists who want Obama to get tougher on coal, the largest source of carbon
dioxide.

It also allows Obama to make headway on a second-term push to tackle climate change, even though
energy analysts predict that few new coal plants will be built in the face of low natural-gas
prices and Environmental Protection Agency rules that require no controls on carbon for new
natural-gas plants.

Before joining the Energy Department, Greenwald headed the National Enhanced Oil Recovery
Initiative, a consortium of coal producers, power companies and state and environmental officials
promoting the process.

But the environmental benefits of this enhanced oil recovery aren’t as certain as the
administration advertises.

“Enhanced oil recovery just undermines the entire logic of it,” said Kyle Ash of Greenpeace, one
of the few environmental groups critical of the process. “They can’t have it both ways, but they
want to really, really bad.”

That has become a theme in some of Obama’s green-energy policies.

For wind power, the government has shielded companies from prosecution for killing protected
birds with giant turbines.

For corn-based ethanol, the administration underestimated the environmental effects of millions
of new acres of corn farming. The government even failed to conduct required air- and water-quality
studies to document its toll on the environment.

The administration wants to make similar concessions to make carbon-capture technology a
success.

A 2009 peer-reviewed paper found that for every ton of carbon dioxide injected underground into
an oil field, four times as much carbon dioxide is released when the oil produced is burned.

Administration officials counter by saying the oil was going to be extracted anyway, so the
policy should be seen only as reducing carbon dioxide from coal plants.

In Mississippi, where Southern Co.’s Kemper County power plant eventually will supply two oil
producers with carbon dioxide, Denbury Resources Inc. says it would not be able to produce oil
there otherwise.

The federal support for Kemper lowers the cost of installing the carbon-capture equipment and,
ultimately, the cost of carbon dioxide for the oil producer.

The nearly $5 billion project received $270 million from the Energy Department, before the Obama
administration, and $279 million in federal tax credits.

While Kemper is the first, it’s not the only one. Obama’s Energy Department has provided $1.1 b
illion to six projects that capture carbon and sell it to oil companies. Four of those projects are
power plants. And the EPA recently highlighted two of those projects, with a combined $858 million
in federal money, as a way to reduce power-plant emissions. Both plan on selling the carbon dioxide
to oil companies.